by Calculated Risk on 10/13/2010 05:39:00 PM

From the FHFA: Statement By FHFA Acting Director Edward J. DeMarco On
Servicer Financial Affidavit Issues

“On October 1, FHFA announced that Fannie Mae and Freddie Mac are working with their respective servicers to identify foreclosure process deficiencies and that where deficiencies are identified, will work together with FHFA to develop a consistent approach to address the problems. Since then, additional mortgage servicers have disclosed shortcomings in their processes and public concern has increased.

Today, I am directing the Enterprises to implement a four-point policy framework detailing FHFA’s plan, including guidance for consistent remediation of identified foreclosure process deficiencies. This framework envisions an orderly and expeditious resolution of foreclosure process issues that will provide greater certainty to homeowners, lenders, investors, and communities alike. ..."

This is a four-point plan:

1) Verify Process -- Mortgage servicers must review their processes and procedures and verify that all documents, including affidavits and verifications, are completed in compliance with legal requirements. ...

2) Remediate Actual Problems -- When a servicer identifies a foreclosure process deficiency, it must be remediated in an appropriate and timely way and be sustainable.

Note: this includes actions for a) Pre-judgment foreclosure actions, b) Post-judgment foreclosure actions (prior to foreclosure sale), c) Post-foreclosure sale (Enterprise owns the property), and d) Bankruptcy Cases. This includes actions to clear title.

3) Refer Suspicion of Fraudulent Activity

4) Avoid Delay -- In the absence of identified process problems, foreclosures on mortgages for which the borrower has stopped payment, and for which foreclosure alternatives have been unsuccessful, should proceed without delay.